Markets likely to start session on positive note

Indian markets made a comeback on Wednesday, after a losing streak that stretched to five consecutive trading sessions, on account of strength in IT stocks. Today, the start of session is likely to be positive tracking gains in Asian peers. Some support will come as Managing Director of the International Monetary Fund Kristalina Georgieva said a high growth rate for India, as projected in the latest World Economic Outlook, is not only healthy for the country but also positive news for the world. Some optimism may come with Union minister Nitin Gadkari’s statement that the PM Gati Shakti National Master Plan (NMP), aimed at improving multi-modal connectivity and last-mile connectivity across the country, is important for achieving the prime minister's dream of making India a $5 trillion economy by 2024-25. Besides, NITI Aayog CEO Amitabh Kant said that India should aspire to become a high-income country by 2047 and this would need sustained economic growth year after year. However, there may be some cautiousness as retail inflation for farm and rural labourers increased to 6.09 per cent and 6.33 per cent in March 2022, respectively, mainly due to higher prices of certain food items and clothing. Traders may be concerned as dismissing the contention that currency devaluation encourages exports, Commerce and Industry Minister Piyush Goyal said weakening of the rupee would not be in the nation's interest in the long run. There will be some buzz in hotel industry stocks as rating agency Icra said that hospital industry revenue growth is likely to moderate in FY23 due to the large base in the previous fiscal, although income and profit margins are expected to remain healthy ahead. Oil & gas industry stocks will be in focus with report that India's crude oil production fell 2.67 per cent in the fiscal year ending March 31, as state-owned ONGC produced less than the target, but natural gas output rose helped by KG production by Reliance-BP. There will be some reaction in aviation industry stocks with the Directorate General of Civil Aviation (DGCA) report showing that domestic airlines carried 24 million passengers during January-March 2022 against 23 million during the same period last year, growing at 6.06 per cent YoY. Lower base effect as well as easing Covid travel restrictions accelerated India's domestic air passenger traffic growth. Investors awaited more of earnings reports from India Inc for cues.

The US markets ended mostly lower on Wednesday as bleak Netflix earnings dragged the technology-heavy Nasdaq Composite. Asian markets are trading mostly in green on Thursday due to an overnight tumble in longer dated U.S. treasury yields.

Back home, Indian equity benchmarks snapped a five-day losing run and ended higher by over a percent on Wednesday with the help of strong buying support in Auto, Energy and Oil & Gas stocks. A largely positive trend in global equities also helped the benchmarks get back on their feet. Markets made positive start and stayed in green for whole day, as traders took encouragement as describing the Indian economy's recovery from the COVID-19 pandemic as distinct and pronounced, Finance Minister Nirmala Sitharaman exuded confidence about India posting robust economic growth this decade. Separately, she said the US-India relationship is at its best and will strengthen the global order in these challenging times. Some solace came as private report stated that hiring activity witnessed a 6 per cent year-on-year growth in March this year, supported by a rebound in economic activities and led by sectors such as banking and telecom. Sentiments remained positive in late afternoon deals, as India is planning to set up “digital only” banks and non-banking financial companies (NBFCs) to ensure that business continuity in the lending system is not affected even in exceptional times. Besides, the government has set the foodgrain production target at a record level of 328 million tonnes for the 2022-23 crop year on the back of good monsoon rains. The target is 3.8 per cent higher compared to previous year's output. Traders overlooked the International Monetary Fund’s (IMF) report in which it has slashed its gross domestic product (GDP) growth forecast of India to 8.2 per cent for fiscal year 2022-23 (FY23) from 9 per cent forecasted earlier. It said that higher commodity prices will weigh on private consumption and investment. This was one of the steepest cuts for emerging economies compared to the IMF’s January WEO forecasts. Meanwhile, the government said 1.03 lakh new manufacturing and service units were set up under its flagship scheme PMEGP along with creation of over 8.25 lakh jobs in the last financial year. Finally, the BSE Sensex rose 574.35 points or 1.02% to 57,037.50 and the CNX Nifty was up by 177.90 points or 1.05% to 17,136.55.